US producer price surges in November from a year ago

• Core PPI was up 6.9 percent from a year earlier, the biggest gain since August 2014

• The PPI for final demand climbed 0.8 percent last month.

Producer prices in the United States increased in November as inflation rise continues to pressure businesses to pass on higher costs to consumers and supply constraints still persist.

According to the Labor Department, the producer price index for final demand climbed 0.8 percent last month. Final demand prices moved up 0.6 percent in each of the 3 prior months.

The PPI increased 9.6 percent year on year through November, the largest year-on-year increase since November 2010. 

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Higher commodity prices and higher labor expenses as a result of a labor shortage are driving up factory-gate inflation. Because stocks are low due to supply chain difficulties, manufacturers simply pass on the higher costs to consumers.

Excluding food, energy, and trade services, final demand prices rose 0.7 percent for the month, the largest rise since climbing 0.8 percent in July. Nonetheless, core PPI was up 6.9 percent from a year earlier, the biggest gain since August 2014. 

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Final demand services increased by 0.7 percent for the month, prices for 

portfolio management advanced 2.9 percent. In contrast, margins for chemicals and allied products wholesaling fell 1.3 percent. The indexes for furnishings wholesaling and for bundled wired telecommunications access services also declined.

The index for final demand goods rose 1.2 percent in November following a 1.3-percent increase in October. 

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While the prices for iron and steel scrap rose 10.7 percent. The indexes for gasoline, fresh fruits and melons, fresh and dry vegetables, industrial chemicals, and jet fuel also moved higher. Conversely, prices for diesel fuel decreased 2.6 percent. 

Consumer Price Index 

The recovery of the U.S. economy from the pandemic has caused the consumer price index (CPI) to jump 6.8 percent year on year in November. 

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The core CPI, excluding food and energy, maintained at its highest level since mid-1991, growing rapidly by 0.5 percent in November and by 4.9 percent year on year.

Food costs have risen by 6.1 percent in the last year, while energy prices have risen by 33.3 percent since November 2020, with a 3.5 percent increase in November. The price of gasoline has soared by 58.1 percent. 

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The Labor Department said the increases for the food and energy components were the fastest 12-month gains in at least 13 years.